Construction Inputs Are Changing: How Low Carbon Steel and Cement Shift 2026 to 2028 CapEx

Across Southeast Asia, low carbon steel and lower clinker concrete are moving from pilot purchases to mainstream specifications. The real question for owners and developers is no longer whether to use them, but how the green premium will land in the budget and when to commit so that tenders stay competitive. What follows is a practical guide to the coming two to three years that shows where costs move, how to plan procurement, and which design choices cut both carbon and spend without hurting the schedule.

Why these inputs are changing

Steel and cement sit at the heart of embodied carbon. Steelmakers are shifting a larger share of output to electric arc furnaces that use scrap and in some cases blend with direct reduced iron. As more mills disclose environmental product declarations, buyers can finally see plant level footprints rather than industry averages. That transparency is already shaping specifications in the region.

Cement works differently. The single most powerful lever is to reduce the clinker content of concrete by substituting supplementary cementitious materials such as slag, fly ash, or calcined clays. Batching plants need the right logistics and quality control to deliver these blends consistently, but when they are in place the carbon savings are immediate. Longer term, efficiency upgrades, cleaner fuels, and carbon capture may change the game, yet the practical gains you can bank in the next project cycle start with clinker reduction and better structural design.

There is also a policy pull. From 2026 the European Union moves its border adjustment from reporting to paid certificates. If any part of your supply chain touches European buyers, embedded emissions begin to show up directly in price. Even if your tenants are all regional, lenders, insurers, and rating tools are now rewarding projects that disclose and reduce embodied carbon. That shift is pushing low carbon materials out of the sustainability slide deck and into purchase orders.

Why the 2026 to 2028 window matters

Two forces collide in this window. On the demand side, corporate targets and building ratings are tightening. Owners want to hit embodied carbon thresholds without giving up returns. On the supply side, greener material capacity is scaling, but demand often grows faster than output. The result is a market where availability and verification can be as important as unit price.

Planning now pays because the premium is not only a number on a quote. It is also the way a contract captures verification, the time needed for trials and approvals, and the risk that a supplier offers a last minute substitution when a plant is full. Teams that set the rules early will pay less, move faster, and keep their credits intact at completion.

How the premium shows up in the budget

A premium can creep in through three channels. First is a higher unit price for certain steel grades or concrete mixes. Second is the cost of verification such as plant specific environmental product declarations, batch data, and audits. Third is the program effect, for example the time a plant needs to qualify a new mix or the buffer you add because a fabricator has a full shop.

Boards respond best to a clear range rather than a single point estimate. A simple materials sensitivity gives that clarity.

Cost sensitivity example for a typical mid rise

Scenario	Steel USD per tonne	Concrete USD per cubic metre	Share of total CapEx	Change versus baseline
Baseline	700 to 800	110 to 130	45 to 55 percent	0
Moderate low carbon mix	700 to 950	120 to 150	46 to 57 percent	plus 1 to 3 percent
High low carbon mix	850 to 1,050	130 to 170	48 to 60 percent	plus 3 to 6 percent

These are placeholders for planning, not quotes. The point is simple. A two to six percent swing in total CapEx is manageable when discovered and planned before tender award. It is painful when discovered after.

Steel choices that move both carbon and cost

The most reliable path in the next two years is to raise the share of electric arc furnace steel with clear declarations and to reserve high specification green steel for the parts of the structure where it matters most. Ask for plant level declarations, recycled content, and the energy mix at the mill. Keep traceability tight with heat numbers so that a switch of mill or billet does not erase your credits.

Lead time often beats price. In busy markets, shop capacity and logistics can drive cost more than the tag on a tonne. Move rebar shop drawings forward in the program, secure fabrication slots early, and pre approve alternates so a supplier change does not force a return to the engineer and a loss of time.

Cement and concrete levers you can control now

Start with clinker reduction. Agree the target substitution range and test mixes early. Make the specification performance based so the engineer is free to deliver required strengths and durability with lower cement. Check the readiness of the batching plant and the supply chain for slag, fly ash, or calcined clays. Where plants are not ready, a small design change can deliver the same savings. Higher strength concrete in columns, rationalised spans, or an alternative slab system can lower total cement in the structure with little impact on program.

The reason this matters is scale. Concrete is often the larger driver of embodied carbon in a typical office or logistics box simply because of volume. A well planned blend of supplementary materials, mix optimisation, and modest structural redesign can deliver a 25 to 45 percent cut in concrete related embodied carbon. In many projects that single choice moves the whole structure into a comfortable rating band.

Ratings and procurement pressure you will feel

Whole life carbon tools now include embodied carbon credits that only count with proper documentation. Singapore Green Mark is a clear example. It asks for measured reductions against reference values and for proof at product and plant level. That means a project can do the right thing physically and still lose points if the paperwork is not ready. The lesson is to treat verification as a deliverable with an owner, a deadline, and a file path.

At the same time, cross border carbon rules are real money for some owners. If you export frames, facade components, or precast elements, model the impact of European border charges in your quotes from 2026 onward. Even if you do not export, lenders are already using green loan frameworks that reward projects with clear embodied carbon plans. Many owners in the region have seen interest margins fall when they present a credible package of low carbon materials and a verification plan. That is part of the value story and it belongs in the board paper.

Budgeting, tender timing, and contract language

Move the approvals that can bite you to an earlier stage. Bring concrete mix trials forward and freeze the mixes in time for cost certainty. Fix the steel package scope and shop drawings earlier so fabrication capacity is secured. The more you lock before tender award, the fewer surprises at novation.

Put carbon in the contract. Use performance based language for concrete with a stated range for cement substitution, target strengths at relevant ages, and a clear path for trials. Require plant specific declarations for steel, identify accepted indices for any escalation, and give yourself audit rights on materials substitutions. The aim is not to punish a contractor. The aim is to avoid last minute swaps that break your credits or force design changes.

Design choices that lower both carbon and cost

The cheapest tonne of steel or cement is the one you never buy. Design teams can cut quantities without hurting performance. Composite or voided slabs reduce mass while keeping stiffness. Higher strength concrete in vertical elements allows leaner mixes in slabs. Standardised rebar cages reduce waste and speed fabrication. Early coordination with building services avoids heavy late penetrations that add steel and time. None of these ideas is exotic. The value lies in doing a few of them early and doing them well.

A short project vignette

Imagine a mid rise office of twenty five thousand square metres of gross floor area with two basement levels. The baseline uses conventional basic oxygen furnace steel and ordinary portland cement concrete. Materials account for roughly half of total CapEx.

The team decides to target a credible but not extreme package. Sixty percent of rebar and sections come from verified electric arc furnace plants. The remainder stays mainstream but with plant declarations. Concrete moves to an average clinker substitution of thirty percent across mixes with performance based specifications. Structural spans are tuned to shave concrete mass without touching net usable area. Trials for mixes start early and the batching plant confirms supply of slag and fly ash in the required windows.

The result is straightforward. The blended premium at materials level comes in near two to three percent of total CapEx, including the time for trials and verification. Structure related embodied carbon falls by roughly one third. The approval timeline is smoother because the team locked the rules earlier and the contractor priced to those rules. On the finance side, the lender offers a modest green margin benefit. On the leasing side, the owner has a credible story that helps win tenants with supply chain reporting needs. The project did not chase hero materials everywhere. It built a plan and bought what mattered.

Risks that most often hit budget or time

Three risks show up again and again. First, batching plants that promise a blend but cannot deliver it consistently. The fix is early trials and a fallback mix. Second, verification that falls between teams. Credits are lost because documents were not collected, not because the concrete was wrong. The fix is a single owner for declarations, batch data, and transport logs with a checklist and dates. Third, lead times that were not updated when a mill or fabricator hit capacity. The fix is to pre qualify at least two fabricators and to specify acceptable alternates so a change does not require a redesign.

What this means for Mymland

This is a portfolio moment, not a one off tender tweak. Mymland can standardise a materials playbook that sets out acceptable steel routes, concrete substitution bands, and the documents needed to protect credits. Projects then start with rules that suppliers already understand. Bids can present two pathways for materials, one moderate and one higher ambition, and the board can see the CapEx range next to the embodied carbon outcome. That turns debate into decision.

Verification should move upstream. Mills, fabricators, and batching plants that can supply plant level declarations and consistent quality should be pre qualified, then named in contracts with clear substitution controls. That single step has saved many owners from late changes that would have voided credits.

Finally, the value story needs to be told in cash terms that matter to investors. Any premium should be presented next to financing benefits from green loans, to rating uplifts that help valuation, and to lease up velocity where tenants care about credible low carbon specifications. In a market where many assets compete on similar rent and location, a proven pathway to lower embodied carbon is a useful tie breaker.